In pre-vote boost for farmers, Trump to ease ethanol fuel rules

US President Donald Trump supports raising the ethanol content level in gasoline that can be sold year round, delivering a win for farmers ahead of hotly contested midterm elections, the Agriculture Department said Tuesday.

The decision, which Trump was widely expected to announce at a rally in Iowa later Tuesday, comes down squarely on side of agriculture in a long-running dispute with the oil industry, which has campaigned against allowing so-called E15, or fuel containing up to 15 percent ethanol, to be sold during the summer months.

Agriculture Secretary Sonny Perdue said Tuesday the decision meant Trump was delivering on a campaign pledge.

"Consumers will have more choices when the fill up at the pump, including environmentally friendly fuel with decreased emissions," he said in a statement.

Trump's rally later Tuesday will be held in the town of Council Bluffs, located in an Iowa congressional district where his trade war -- in which China has slapped painful tariffs on soybean exports -- has left local farmers deeply uneasy.

Both Republican and Democratic congressional candidates in the district have criticized Trump's trade policies. But Iowa is the largest US producer of ethanol and farmers have long called for requiring higher levels in gasoline.

US refineries currently either blend about 10 percent plant-based ethanol into retail gasoline or purchase credits from their rivals to meet regulatory obligations.

The sale of the higher ethanol content E15 is currently banned in the summer due to concerns about smog.

The American Petroleum Institute, the chief body of the US oil lobby, has run television ads during broadcasts that Trump watches, claiming E15 can harm some gasoline-powered engines -- a position with bipartisan support in the US Senate.

At the same time, a White House official told reporters on Monday, Trump would also move to stabilize prices on the market for credits that many refiners purchase to show they are blending in the required amount of ethanol -- which could mollify some oil industry opposition.